Can American Express Sue?

My best friend has, or had an American Express credit card which is currently in default. She received this account just before her approval for SSI in NY. She currently lives in the state of NC. When I ask her the current balance due she becomes very vague. However, almost 2 years ago, she had a credit limit of $10,000, and had an available credit of about $200, then had to use $167 of that for an emergency car repair. Since then, I believe she has been about to make payments of about $30 a month for a few months, but for over a year I don't believe she has made any payments. I'm sure she owes over $10,000 now. My question is, “Do you think American Express will sue her, thus leaving a judgment on her credit report, or if she waits 7 years will this negative report be removed?

Re: Can American Express Sue?

My best friend has, or had an American Express credit card which is currently in default. She received this account just before her approval for SSI in NY. She currently lives in the state of NC. When I ask her the current balance due she becomes very vague. However, almost 2 years ago, she had a credit limit of $10,000, and had an available credit of about $200, then had to use $167 of that for an emergency car repair. Since then, I believe she has been about to make payments of about $30 a month for a few months, but for over a year I don't believe she has made any payments. I'm sure she owes over $10,000 now. My question is, “Do you think American Express will sue her, thus leaving a judgment on her credit report, or if she waits 7 years will this negative report be removed?

Yes. The can and very well might sue. Credit scoring aside, this is a major amount of money that is owed.

They might sue, or they might sell the debt and a collection company might sue. Either way, lawsuit = bad news.

She should try to work out a paydown schedule with them, or it could get really bad really fast

Re: Can American Express Sue?

Well, the issue here may be the the SSI. That is not a lot of money to live on. She just may not have it to pay. If there is any way she can work a settlement, i.e. sell something, insurance loans, pawn, etc....that may be her best bet. The average person really has tons of stuff worth something....to someone.

Re: Can American Express Sue?

She would have to look at the the DOFD of the debt to obtain the criteria for determining the SOL of the account. Once you have figured out the DOFD and the SOL of your state, then you would know if they were still able to take her to court for a judgement.

Re: Can American Express Sue?

If she is living on SSI, she may be what's known as "judgement proof"... So that even if Amex files and receives a judgement against her, no court would force her to actually pay. Best advice would be for her to show up to court bringing documentation of her limited income if she's ever summoned. A judgment would hurt her credit score, but I wouldn't think that she could be garnished.

From Wikipedia:

"The term judgment proof is most commonly used in tort law contexts to refer to defendants or potential defendants who are financially insolvent. Even if a plaintiff were to secure a legal judgment against an insolvent defendant, the defendant's lack of funds would make the satisfaction of that judgment difficult, if not impossible, to secure.In such cases plaintiffs might move for wage garnishment based on the judgment. However, if the debtor is living on income from social security benefits, a retirement pension, or other social welfare, then this may not possible, as such income is often subject to legal protections against garnishment by creditors."

Re: Can American Express Sue?

I had heard AMEX did a lot of things in house and so was interested if they actually would sue. Turns out they 100% can and will. A quick Google search of "American Express Judgement" turns back A LOT of hits, some for as low as $3,000. I think the "in house" description of AMEX probably has more to do with collection efforts and not using outside CAs, but who knows. Either way that is a lot of money that AMEX is going to want back.

Re: Can American Express Sue?

If she is living on SSI, she may be what's known as "judgement proof"... So that even if Amex files and receives a judgement against her, no court would force her to actually pay. Best advice would be for her to show up to court bringing documentation of her limited income if she's ever summoned. A judgment would hurt her credit score, but I wouldn't think that she could be garnished.

From Wikipedia:

"The term judgment proof is most commonly used in tort law contexts to refer to defendants or potential defendants who are financially insolvent. Even if a plaintiff were to secure a legal judgment against an insolvent defendant, the defendant's lack of funds would make the satisfaction of that judgment difficult, if not impossible, to secure.In such cases plaintiffs might move for wage garnishment based on the judgment. However, if the debtor is living on income from social security benefits, a retirement pension, or other social welfare, then this may not possible, as such income is often subject to legal protections against garnishment by creditors."

And to add to that point, that alone is not going to stop them from suing, I'd assume there are a handful of tax reasons why they'd want to pursue a court decision, money or no money from her

Re: Can American Express Sue?

If she is living on SSI, she may be what's known as "judgement proof"... So that even if Amex files and receives a judgement against her, no court would force her to actually pay. Best advice would be for her to show up to court bringing documentation of her limited income if she's ever summoned. A judgment would hurt her credit score, but I wouldn't think that she could be garnished.

From Wikipedia:

"The term judgment proof is most commonly used in tort law contexts to refer to defendants or potential defendants who are financially insolvent. Even if a plaintiff were to secure a legal judgment against an insolvent defendant, the defendant's lack of funds would make the satisfaction of that judgment difficult, if not impossible, to secure.In such cases plaintiffs might move for wage garnishment based on the judgment. However, if the debtor is living on income from social security benefits, a retirement pension, or other social welfare, then this may not possible, as such income is often subject to legal protections against garnishment by creditors."

And to add to that point, that alone is not going to stop them from suing, I'd assume there are a handful of tax reasons why they'd want to pursue a court decision, money or no money from her

Absolutely! A judgment against her counts differently on their balance sheet than an unpaid 10k + Liability.

Re: Can American Express Sue?

If they secure a judgment, that is an initial court determination of the validity of the debt along with an order for its repayment.

If the judgement remains unsatisfied, the judgment creditor may then go back to the court and secure a writ for satisfaction of the judgment, which would include specfic authority to take property, attach wages, etc. Insolvency might be a defense at court, causing the judge not to grant the means requested by the prevailing plaintiff to attach property or wages, but that is up to the court.

Judgments have specific periods of enforceability, but the judgment creditor can easily get the judgement renewed by the court by showing continued but unsuccessful atttempts to collect on the judgement. The initial judgment has a statutory CR exclusion date of 7 years, but can be renewed, thus extending its CR inclusion.

I would not rely upon CR exclusion of 7 years from initial judgment, nor upon expiration of the original judgment as basis for decision making.

The more important potential is their bringing of additional legal action to gain court order for its actual satisfaction. The sheriff at your door.

Forums posts are not provided or commissioned by FICO. Forums posts have not been reviewed, approved or otherwise endorsed by FICO. It is not FICO's responsibility to ensure all posts and/or questions are answered.

† Advertiser Disclosure: The listings that appear on myFICO are from companies from which myFICO receives compensation, which may impact how and where products appear on myFICO (including, for example, the order in which they appear). myFICO does not review or include all companies or all available products.

‡ Credit cards for FICO Score ranges: The score ranges are guidelines based on internal myFICO analysis of actual applicant approvals, and having a FICO Score in a particular range does not guarantee you will be approved for credit cards recommended in that range. These ranges were not provided by any card issuer.

* For complete information, see the terms and conditions on the credit card issuer’s website. Once you click apply for this card, you will be directed to the issuer’s website where you may review the terms and conditions of the card before applying. While myFICO always strives to present the most accurate information, we show a summary to help you choose a product, not the full legal terms - and before applying you should understand the full terms of products as stated by the issuer itself.

IMPORTANT INFORMATION: All FICO® Score products made available on myFICO.com include a FICO® Score 8, along with additional FICO® Score versions. Your lender or insurer may use a different FICO® Score than the versions you receive from myFICO, or another type of credit score altogether. Learn more

FICO, myFICO, Score Watch, The score lenders use, and The Score That Matters are trademarks or registered trademarks of Fair Isaac Corporation. Equifax Credit Report is a trademark of Equifax, Inc. and its affiliated companies. Many factors affect your FICO Score and the interest rates you may receive. Fair Isaac is not a credit repair
organization as defined under federal or state law, including the Credit Repair Organizations Act. Fair Isaac does not provide "credit repair" services or advice or
assistance regarding "rebuilding" or "improving" your credit record, credit history or credit rating. FTC's website on credit.